Correlation Between Mivtach Shamir and Sure Tech

Can any of the company-specific risk be diversified away by investing in both Mivtach Shamir and Sure Tech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mivtach Shamir and Sure Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mivtach Shamir and Sure Tech Investments LP, you can compare the effects of market volatilities on Mivtach Shamir and Sure Tech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mivtach Shamir with a short position of Sure Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mivtach Shamir and Sure Tech.

Diversification Opportunities for Mivtach Shamir and Sure Tech

0.19

Correlation Coefficient

Mivtach Shamir  Sure Tech

Average diversification

The 3 months correlation between Mivtach and Sure is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Sure Tech Investments LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sure Tech Investments and Mivtach Shamir is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mivtach Shamir are associated (or correlated) with Sure Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sure Tech Investments has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Sure Tech go up and down completely randomly.

Pair Corralation between Mivtach Shamir and Sure Tech

Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 0.98 times more return on investment than Sure Tech. However, Mivtach Shamir is 1.02 times less risky than Sure Tech. It trades about 0.24 of its potential returns per unit of risk. Sure Tech Investments LP is currently generating about -0.04 per unit of risk. If you would invest  1,826,000  in Mivtach Shamir on December 30, 2024 and sell it today you would earn a total of  487,000  from holding Mivtach Shamir or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Mivtach Shamir  vs.  Sure Tech Investments LP

Mivtach Shamir

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivtach Shamir sustained solid returns over the last few months and may actually be approaching a breakup point.

Sure Tech Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sure Tech Investments LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sure Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mivtach Shamir and Sure Tech

The main advantage of trading using opposite Mivtach Shamir and Sure Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mivtach Shamir position performs unexpectedly, Sure Tech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sure Tech will offset losses from the drop in Sure Tech's long position.

The idea behind Mivtach Shamir and Sure Tech Investments LP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.